India to maintain its growth sprint in 2025: UN

India is set to remain one of the fastest growing economies in the world in 2025-26 according to a new mid-year growth estimate. The mid-year update to the World Economic Situation and Prospects Report 2025, published by the United Nations Department of Economic and Social Affairs (UNDESA) pegs India’s growth in calendar 2025 at 6.3%. The world economy is expected to grow at 2.4%

India’s estimated growth for the year remains high even after 0.3 percentage points of growth being shaved off from the original estimate for the year. In 2026, India is forecasted to grow at 6.4%, again slower by 0.3 percentage points from the earlier forecast. This is largely due to uncertainty in the global economy. The growth estimate for India is broadly in line with other estimates such as the one issued by the Reserve Bank of India (RBI) in its April Monetary Policy Report. The central bank had pegged real GDP growth in 2025-26 at 6.5%.

The report notes that, “The broad-based downgrade arises from a series of increases in United States tariffs that have been unprecedented in size, scope and speed; retaliatory measures by China, the European Union and Canada; as well as uncertainty arising from selective implementation pauses and bilateral negotiations.” It did not take into account the most recent developments such as the 90 day agreement between the US and China that was announced earlier. Under the agreement both countries will bring down tariffs they have imposed on each other’s exports from the unprecedented levels announced in the last 1.5 months.

These quick announcements and their equally fast reversals have further fuelled uncertainty in the global economy. This is over and above the chaotic economic conditions due to wars and conflicts that are raging in different parts of the world. The report has reduced its estimate of global economic growth by 0.4 percentage points from the original estimate issued earlier in the year.

On India, the report adds that, “India’s economy is forecast to grow by 6.3 per cent in 2025, down from 7.1 per cent in 2024. Resilient private consumption and strong public investment, alongside robust services exports, will support economic growth. While looming United States tariffs weigh on merchandise exports, currently exempt sectors—such as pharmaceuticals, electronics, semiconductors, energy, and copper—could limit the economic impact, though these exemptions may not be permanent.”

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